Copyright 1999 The Washington Post
The Washington
Post
November 9, 1999, Tuesday, Final Edition
SECTION: A SECTION; Pg. A23; THE FEDERAL PAGE
LENGTH: 1120 words
HEADLINE:
Medicare Relief Spurs a Gold Rush; Health Care Industry
Interest Groups Winning Millions in Concessions
BYLINE:
Charles R. Babcock, Washington Post Staff Writer
BODY:
A $ 10 billion congressional package designed to provide broad-based
emergency relief to health care providers who say they were hurt unfairly by
prior Medicare cuts has become a vehicle for special
concessions for some interest groups.
The nursing home industry, for
example, persuaded Senate Finance Committee members to include $ 800 million in
extra aid for some patients, though an administration watchdog questioned the
need for the new cash. An Alabama company that owns rehabilitation hospitals won
a provision in the House bill that passed Friday that would let it move quickly
to a new Medicare payment schedule.
Providers of home
oxygen and other medical equipment succeeded in getting language in both bills
temporarily blocking regulators' authority to cut their rates. And drug and
medical device makers worked to get several hundred million
dollars of hospital outpatient payments set aside to pay for expensive new drugs
and therapies. They did so even though administration officials said the
provision is so complex it would delay another requirement, and cost
Medicare beneficiaries an estimated $ 1.4 billion in higher
outpatient copayments.
Attempts to win special favors late in a session
of Congress are not uncommon. But the evolution of the pending
Medicare bills shows how lobbyists, and lawmakers, can prevail
when they master the details behind terms like RUGs (a type of payment) for SNFs
(skilled nursing facilities), "inherent reasonableness" regulations, and other
arcana of the highly regulated health care industry. It also demonstrates the
difficulty Congress has judging the validity of needs when objective evidence is
scarce.
The Clinton administration agrees that Medicare
providers need more money to fix "unintended consequences" of payment reductions
made by the Balanced Budget Act of 1997. But officials say it is unclear that
the distress cited by some providers was caused by the cuts or other factors,
such as unrelated business decisions or a crackdown on fraud and abuse.
Budget director Jacob "Jack" Lew said in a letter Friday, for instance,
that giving extra billions to managed-care plans is "unwarranted" because
studies show they are overpaid now.
"Whenever you have a vehicle moving
through Congress it becomes a target for people to try to attach relief, whether
warranted or not, for their particular industry or group," said Martin Corry, a
lobbyist for AARP, whose members are age 50 and older. He said he didn't think
the bills so far are too weighed down by special-interest items.
Rep.
Bill Thomas (R-Calif.), chief sponsor of the House bill that passed 388-25, said
members and interest groups alike are adept at saying "More, please," as Oliver
Twist said about his empty bowl of porridge. "It's the way the place [Congress]
is," he said.
Thomas said policy, not lobbyists' arguments, was the
basis for his bill. "We don't write rifle shots," he said, in reference to the
practice of including narrow provisions that apply only to one company or
facility.
The Senate bill has several provisions providing special
favors to particular entities. Two Mississippi hospitals are mentioned by name,
as are counties in North Carolina and New York. Another provision, though it
doesn't mention a facility by name, was requested by Sen. Carl M. Levin
(D-Mich.) to help a nursing home in Flint, Mich., that couldn't get what it
wanted from federal regulators.
Many Medicare provider
groups have lobbied aggressively for several months, claiming the cuts in their
payments mandated in the 1997 act were too severe. The home oxygen, hospital and
nursing home industries generated studies to try to convince Congress of the
need for more money.
The American Health Care Association, a nursing
home trade group, for example, has run extensive television commercials, taken
out a full-page ad in The Washington Post and sent a letter to every member of
Congress in the past week citing bankruptcies by major companies and extolling
the Senate bill's solution to its problems.
Haley Barbour, a former
Republican National Committee chairman hired to lobby for nursing home
companies, said he has written memos to Thomas trying to convince him the Senate
bill is better. He and Linda Keegan, AHCA executive vice president, said money
for rehab services is needed because many patients who need rehab also have
other serious problems that are expensive to treat.
The inspector
general of the Department of Health and Human Services said a recent survey
showed that it was getting easier, not harder, to place patients needing
rehabilitation services in nursing homes.
HealthSouth Corp., a
Birmingham company that is the largest owner of rehab hospitals, worked through
its for-profit trade group over the last few weeks to get permission to bill for
its services at a new rate right away, instead of having the increase phased in
over a few years. Some rehab hospitals object, fearing the Health Care Financing
Administration (HCFA), which administers Medicare, would cut
their payments.
Rep. Fortney "Pete" Stark (D-Calif.), the ranking
Democrat on the Ways and Means health subcommittee, called the provision a
"windfall" for HealthSouth. Thomas said he saw no harm in the provision because
it isn't supposed to cost the government more.
It was also over the past
few weeks that representatives of the pharmaceutical, medical
device and hospital industries met at Thomas's suggestion and agreed to
set aside a small part of the estimated $ 17 billion in hospital outpatient fees
to pay for expensive new therapies. Drug lobbyists then worked to get references
to their company's creations in the bills.
Home oxygen and other
equipment suppliers were successful in their top priority, getting language in
both bills barring HCFA from making further cuts in their rates. Sen. Tom Harkin
(D-Iowa), who put the so-called "inherent reasonableness" power in the 1997 law,
says the ban would block more than $ 500 million in savings on overpriced
products. A home oxygen lobbyist, who asked not to be named, said the home
equipment industry objected because HCFA agents were imposing the cuts without
due process.
Rep. Benjamin L. Cardin (D-Md.), a member of the House Ways
and Means Committee, says Thomas has controlled the size of the House bill and
the impact of the lobbyists. There are now only a few special interest
"ornaments" on the House bill, he said.
But he fears that in this week's
rush to adjourn Congress for the year, negotiators will bow to pressure and
insert more money for the interest groups. "By Wednesday we'll be giving
everyone everything," Cardin predicted. "It will become a Christmas tree."
LOAD-DATE: November 09, 1999
